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Transferring inheritance to equity portfolio
Dear investors, I have recently inherited significant wealth and hold a good chunk of individual Indian equity holdings which has been inherited. Am still quite young and in the process of diligently investing my wealth to create significant in coming years. We are talking about quite a few crores here. I presently live abroad and usually invest in the US market- handpick individual equity rarely when time is right otherwise chill buying S&P500 ( great track record over 120 years) For my Indian wealth it’s primarily geared into real estate and was thinking about switching a certain percentage into equity over the coming years as am a big equity believer and planning to return in a few years. Am a believer of index funds and read a lot of jack bogle, JL Collins. That’s what is my investment philosophy, low cost , index, invest high amounts and hold for decades I am thinking of investing the Indian portfolio henceforth as follows: - Nifty 50 - ( 30 percent) Little needs saying, India’s large cap index and a tracker of the economy. Holds about 55 percent of free float market cap and very liquid, gives around 12 percent CAGR - Nifty 500 ( 30 percent) Probably has given about the same returns as Nifty 50 ( small difference in rolling return but believe that would be washed away in higher expense ratio, tracking errors). Has free float market cap coverage nearly 92 percent Choose this to cover a more wider range of Indian equity as fifty stocks is not a lot. May or may not yield higher returns then nifty 50 in coming decades. But I dnt believe in individual mid cap index or small cap index ( feel they are not broad market exposure and dnt fit fit in my philosophy). No to momentum funds and no to managed funds, only need index tracker - S&P500 ( 30 percent) Tax issues can be a hurdle, but won’t be selling for another 2 or 3 decades , who knows what tax rules will be then. Gives access to some power house companies and can give a cagr nearly 10 percent which in rupee terms will be more - Nasdaq 100 ( 10 percent) My guilty pleasure, dnt follow the investment philosophy but love the companies listed and believe will do a good job. May very well not include this, and split this money with nifty 50 and 500 Target is to build a large corpus and get power of compounding to work for 2-3 decades. Will accept a CAGR of 12- 13 percent happily. What’s your opinion5
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